North American PET bottle resin prices drop 7 cents

AKRON, OHIO — Lower demand and declining feedstock prices have helped send North American PET bottle resin prices down an average of 7 cents per pound since March 1.The drop was split between 2 cents in March and 5 in April, according to market sources. Combined with a 2-cent increase that regional buyers saw in January or February, prices now are down a net of 5 cents so far in 2013. That equates to a drop of about 5 percent, based on prices for PET bottle resin shown on the Plastics News resin pricing chart.By comparison, prices for that material had shown an increase of an average of 8 cents per pound — or almost 9 percent — for full-year 2012.Colder-than-normal spring weather in the U.S. Midwest and East Coast served to drive down beverage consumption, including the carbonated soft drinks and bottled water that make up a big portion of North American PET demand. Ongoing lightweighting of PET bottles in a variety of markets also played a role in reducing PET demand in the first four months of the year, sources said.In the first quarter of 2013, Global PET sales for Indorama Ventures Public Co. Ltd. grew 10 percent to almost $1.9 billion. But PET-related pretax profit at the Bangkok-based firm fell 13 percent to $59 million.Indorama officials said in a news release that the firm’s first-quarter performance was about 5 percent below internal estimates, but that the outlook is improved for later in the year. Indorama last year announced plans to build a new billion-pound capacity PET plant in North America, but the firm has not settled on a location for the new plant. Indorama already operates PET plants in Decatur, Ala., and Asheboro, N.C.The new Indorama plant will be part of about 3.5 billion pounds of new PET capacity that’s set to open in North America by 2016. The new capacity has been announced in spite of industry estimates that the regional market is oversupplied by almost 2 billion pounds — and in spite of a domestic PET demand growth rate that’s expected to be no higher than 2 percent in the next few years.The new capacity announcements also have caused some in the industry to speculate that older capacity eventually will be shut down. Other markets around the world also are oversupplied with PET, resulting in global operating rates of less than 80 percent.